Cutoff misstatements occur when:
A) the auditor mistakenly asks the bank for the end- of- year bank statement instead of the statement which would include the two succeeding weeks.
B) subsequent period transactions are recorded in the current period.
C) current period transactions are recorded in the subsequent period.
D) both B and C above, but not A

Question

Quizplus · Accepted Answer

Cutoff misstatements occur when transactions are recorded in the wrong period. Both options B and C describe situations where cutoff misstatements may occur, but option A describes an error in obtaining the correct bank statement, which is not a cutoff misstatement. Therefore, option D is the correct choice.

Cutoff Misstatements Occur When